This document has been translated from the Japanese original for reference purposes only. In theevent of any discrepancy between this translated document and the Japanese original, the original
shall prevail.

Corporate Governance Report
Last Update: July 1, 2024

Chilled & Frozen Logistics Holdings Co., Ltd.
Hiromasa Aya
Representative Director,
President and Chief Executive Officer
Contact: +81-3-5291-8100
Securities Code: 9099
https://www.cflogi.co.jp/en/
The corporate governance of Chilled & Frozen Logistics Holdings Co., Ltd. (the “Company”) is described below.

I.

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

1. Basic Views
The Company’s basic policy on corporate governance is to work on clarifying its monitoring system andstrengthening its check-and-balance function for corporate management, recognizing the importance ofbusiness ethics, while endeavoring to disclose corporate information fairly, equitably, and promptly in a moretransparent manner, with a view to earning and sustaining the trust of the general public and investors.
Under the Company’s corporate governance system, the Company has adopted a company with Audit andSupervisory Committee system to exhibit the effectiveness of the system.
[Reasons for Non-compliance with the Principles of the Corporate Governance Code] Updated[Supplementary Principle 4.1.3] (CEO Successor Training)
The Company has established a policy of providing the Group’s officers with opportunities to gain experienceby rotating their positions and offering training to them, with information on the current training period andthe target group of the Group’s officers shared within the Nomination Committee, an advisory body to theBoard of Directors. Going forward, while confirming a training schedule at the meetings of the Board of
Directors in connection with the Company’s management strategies and medium- to long-term management
plan, the Company will consider building a more enhanced system.

-1-

[Disclosure Based on the Principles of the Corporate Governance Code] Updated[Principle 1.4] (Cross-Shareholdings)
The Company holds cross-shareholding shares to enhance medium- to long-term corporate value, taking into
consideration the purpose of strengthening relationships with companies in which the Company has invested
and cooperative business relationships. The Company’s basic policy is to assess the appropriateness of holding
individual cross-shareholding shares at a meeting of the Board of Directors each year, considering various
matters such as the purpose of holding thereof, the economic rationality, the effectiveness of the enhancementof corporate value, and financial strategies. At the meeting of the Board of Directors held in September 2023,
the Board of Directors examined whether to continue cross-shareholdings after its comprehensive review oftransaction-related earnings, dividend income, and valuation difference, as well as on its examination from a
medium- to long-term viewpoint of the relationship with business developed by the Group and new business
opportunities for future business expansion. The Company will reduce cross-shareholdings deemed lessmeaningful, with due consideration to the effect on markets. As a result, the Group has 23 issues of crossshareholders (of which 14 issues are of listed companies) as of March 31, 2024, the same as the end of theprevious fiscal year.
In our view on the exercise of voting rights of cross-shareholdings, the Company exercises voting rights of
all cross-shareholding shares from the standpoint of the enhancement of medium- to long-term corporate
value of the Company and the companies in which the Company has invested. In exercising voting rights, theCompany comprehensively considers the pros and cons of proposals, taking into account the purpose ofholding the relevant cross-shareholding shares and the management and financial status of the relevant
company.
[Principle 1.7] (Related Party Transactions)
The Company, in terms of transactions posing conflicts of interest, oversees the legality of such transactions
by obtaining the approval of the Board of Directors in advance, as per the provisions of the Companies Act,and reporting the results of such transactions to the Board of Directors after they are executed. The Company
also requires transactions with officers and major shareholders to be approved after deliberation at a meetingof the Board of Directors which is composed of more than one Outside Director to avoid damage to corporate
interests and common interests of shareholders unless it is apparent that the terms of the transactions are thesame as those of general transactions. Furthermore, if the transactions fall under transactions with relatedparties prescribed in the Companies Acts and the Regulation on Financial Statements, those transactions aredisclosed in a securities report. The filing of a securities report is a matter for resolution of the Board of
Directors.
[Supplementary Principle 2.4.1] (Policy for Ensuring Diversity and the Status of Implementation of the
Policy)The appointment of the Group’s managers is based on personnel evaluation (ability and performance
evaluation) without discrimination on the grounds of sex, nationality, and recruitment methods. Under thispolicy, the Group appoints women, foreign nationals, and mid-career hires as managers. At the meeting of theBoard of Directors held in May 2023, the Company set a target of having women make up 10% of managerial
positions in the Group in FY2030, considering that diversified perspectives and values are important to ensurecorporate sustainable growth. The Company has not set a target for the appointment of mid-career hires as
managers since the current percentage of mid-career employees in managerial positions is high.
The Group has been moving ahead with human capital initiatives and has established policies on humanresource development and internal environment development. Currently, our human capital initiatives aredisclosed in “Views and Initiatives on Sustainability” of the Annual Securities Report for the 9th fiscal year.
The Group aligns with its Workplace Environment Enhancement Policy, which states, “The Chilled & Frozen(C&F) Logistics Holdings Group provides a workplace environment in which each employee can maximize
their aptitude and capabilities with a sense of pride and mission to ‘support society through logistics.’ Inaddition, we respect the diversity of each person and create a comfortable and worthwhile workplaceenvironment for everyone.” Based thereon, as for human resource development, the Company provides
training by position level to learn necessary skills and a mindset at the different career stages of employees
from future executives to young employees. The Company also formed a team for the advancement of womenand engaged in various activities, including participation in career development seminars for women, making
proposals to improve female uniforms, and disseminating as well as promoting the use of systems for women.

-2-• FY2023
Percentage of managerial positions occupied by women: 3.07%
Percentage of managerial positions occupied by mid-career hires: 43.00%[Principle 2.6] (Roles of Corporate Pension Funds as Asset Owners)
The Group discontinued its corporate pension plan and adopted a corporate defined contribution pension plan
(life plan support system) in April 2022. To support employees in building up their assets and understanding
the plan, the Group has provided all participants in the plan with investment education on the importance oflong-term investment, continued investment, and diversified investment based on their life plans.
[Principle 3.1] (Full Disclosure)(i) Company objectives (e.g., management philosophy), management strategies, and management plans
The Company has set out the Group’s basic policy in the Notice Concerning 3rd Medium-Term Management
Plan posted on our website.
https://www.cflogi.co.jp/en/ir/(ii) Basic views and guidelines on corporate governanceAs stated in “1.1 Basic Views (1)” of this report.
(iii) Board policies and procedures in determining compensation for Directors
The Company has set up the Compensation Committee as a voluntary advisory body. The amount ofcompensation for individual Directors is to be determined by the Board of Directors in light of the results ofa review of its rationality by the Compensation Committee. Compensation for Directors (excluding Directors
who are Audit and Supervisory Committee Members and Outside Directors) consists of basic compensation,
performance-linked compensation, and performance-linked share compensation. Compensation for Directors(Directors who are Audit and Supervisory Committee Members and Outside Directors) consists of fixedcompensation.
(iv) Board policies and procedures in the appointment/dismissal of senior management members andnomination of candidates for Directors and company auditors
The Company has set up the Nomination Committee as a voluntary advisory body. Candidates for Directorsof the Company are required to have a wealth of experience, deep insights, and advanced expertise that areappropriate for Directors of the Company. The Board of Directors nominates candidates in light of the resultsof a review of their qualifications by the Nomination Committee. Directors who are Audit and Supervisory
Committee Members are nominated with the consent of the Audit and Supervisory Committee. If a senior
management member commits a fraudulent act or serious breach of laws, regulations, or the Articles ofIncorporation, and it is objectively determined that dismissal of such member is appropriate, the Nomination
Committee reviews such dismissal and the Board of Directors makes a decision on dismissal throughsufficient deliberation.
(v) Explanation with respect to individual appointments/dismissals and nominations based on (iv) above
The reasons for the appointment/dismissal of senior management members and that of candidates for
Directors when nominating the candidates will be specified in the Notice of the Convocation of Annual
General Meeting of Shareholders.
[Supplementary Principle 3.1.3] (Full Disclosure of Sustainability Information)
1. Disclosure of sustainability initiatives
The Company declared in May 2022 that it would work to solve social issues through business activities
toward the achievement of sustainable logistics business and contribute to the fulfillment of Sustainable
Development Goals (SDGs), agreed upon by the international community, and the Board of Directors resolved
to establish a sustainability policy to support sustainable management that creates next generation logistics
with stakeholders. The Company has identified five major issues (materiality) and disclosed the status of theinitiatives on our website.
https://www.cflogi.co.jp/en/sustainability/-3-2. Disclosure of human capital initiatives
The Company takes the securing of human resources as an important issue. The Company has adopted asystem to promote non-regular employees to regular employees, revised the wage regulations to improvewages of employees, participated in a benefit program that all employees assigned to bases around the country
can use without regional disparities, provided training by position level to learn necessary skills and a mindset
at the different career stages of employees from future executives to young employees and leadership training
for female employees. In addition, the Company has instituted a talent management system. The Company
will continue to disclose information on human capital initiatives.
https://www.cflogi.co.jp/uploads/inf220610.pdf
https://www.cflogi.co.jp/uploads/the_revision_of_3rd_Medium-term_Management_Plan_EN.pdf
3. Disclosure based on TCFD Recommendations
The Company lists environmental measures as a material issue (materiality) to establish a logistics
infrastructure that is friendly to the global environment. In its effort to take environmental measures, theCompany recognizes that the impact of climate change is a priority management issue and that environmental
measures taken in business activities play a vital role in its management. In March 2023, the Company
expressed support for TCFD Recommendations and joined the TCFD Consortium. Going forward, theCompany will follow the recommendations and expand the disclosure of information on our website. The
current information on TCFD is disclosed in “Views and Initiatives on Sustainability” of the Annual Securities
Report for the 9th fiscal year.
[Supplementary Principle 4.1.1] (Scope of Delegation)
The Company’s Board of Directors delegates decision-making authority for business execution of mattersother than those required by laws and regulations to be resolved by the Board of Directors to the Executive
Officers’ Meeting, composed of Executive Officers and others, to establish a more flexible business execution
system that promotes quick decision-making and can respond to changes of the business environment
surrounding the Company.
[Principle 4.9] (Independence Standards and Qualification for Independent Outside Directors)
The Company selects candidates for Independent Outside Directors in accordance with the independence
standards established by the Tokyo Stock Exchange.
[Supplementary Principle 4.10.1] (Independent Advisory Committee such as Nomination Committee andCompensation Committee)
The Company’s Board of Directors consists of 10 Directors, including six Outside Directors, five of whomare Independent Outside Directors. The Company has set up the Nomination Committee and theCompensation Committee, both of which are chaired by Independent Outside Directors, for the purpose of
ensuring the independence and objectivity of the appointment process of Directors, including a successor
training plan, the independence and objectivity of the decision-making process of compensation for theCompany’s officers, and decision-making and the rationality of the basic policy of officers’ compensation
system. The Nomination Committee and the Compensation Committee each consist of seven members, fiveof whom are Independent Outside Directors. The committees ensure a high level of independence andobjectivity with a majority of members being Independent Outside Directors.
[Supplementary Principle 4.11.1] (Views on Diversity and Size of the Board of Directors)
The Company’s Board of Directors consists of the necessary and appropriate number of members—six
Directors who are not Audit and Supervisory Committee Members and four Directors who are Audit andSupervisory Committee Members—to ensure an effective management system and substantive discussions at
meetings of the Board of Directors. In selecting candidates for Directors, to increase independence andtransparency, candidates are reviewed by the Nomination Committee with a majority of members being
Independent Outside Directors and decided by the Board of Directors with due consideration to ensuring
diversity and expertise. Two Independent Outside Directors have experience in management at othercompanies.
The skill matrix is disclosed on our website and in the Notice of Convocation of Annual General Meeting of
Shareholders.
https://www.cflogi.co.jp/ir/corporate/ (Japanese only)-4-

[Supplementary Principle 4.11.2] (Concurrent Positions Held by Directors and Company Auditors)
The status of concurrent positions of Directors of the Company is disclosed in the Business Report and theReference Documents contained in the Notice of Convocation of Annual General Meeting of Shareholders ofeach fiscal year.
[Supplementary Principle 4.11.3] (Evaluation of the Effectiveness of the Board of Directors)
To analyze and evaluate its effectiveness, the Board of Directors of the Company conducted a questionnaire
survey on the status of operation of the Board of Directors and other matters in FY2023. The Board of
Directors discussed its effectiveness on the basis of the results of the questionnaire survey. Distribution andcollection of the questionnaires were entrusted to an external institution. As a result of the survey, theCompany has been given a generally positive evaluation and it believes that the effectiveness of the Board of
Directors is ensured. Meanwhile, regarding the monitoring functions of the Board of Directors, some opinions
were voiced on potential groupwide risks and measures to address them as well as opinions calling for thestrengthening of the risk management system. In light of these opinions, the Company shared awareness on
the issues regarding the further improvement of the functions of the Board of Directors and the revitalizationof discussions. Going forward, the Company, keeping in mind this evaluation, will promptly address theseissues upon sufficient discussions and consideration and continue to advance initiatives to heighten thefunctions of the Board of Directors.
[Supplementary Principle 4.14.2] (Disclosure of Training Policy)
The Company supports Directors’ execution of their duties by collecting and providing information on
economic circumstances, industry trends, compliance, corporate governance, finance and accounting, andother matters that are necessary for Directors to perform their roles and functions. The Company also supports
Directors in acquiring the knowledge necessary to fulfill their roles and responsibilities by inviting external
lecturers to provide lectures on compliance and corporate governance, as necessary. In addition, the Company
has provided Outside Directors with information related to the Group’s corporate philosophy, management
policies, business activities, organizations, and so forth when they assume office for the purpose of enhancing
their understanding of these matters, and the Company continues to provide such information after Outside
Directors’ assuming office. The Company also has taken measures such as having Outside Directors visit
facilities of the Company. The Company considers that Directors should seek advice from external
professionals such as lawyers and consultants to examine issues if deemed necessary for the execution of theirduties and has established a system where Directors can charge the Company for expenses for such advice.
[Principle 5.1] (Policy for Constructive Dialogue with Shareholders)
Placing an emphasis on constructive dialogue with shareholders, the Company has been working to havepersonnel, mainly including senior management members, engage in dialogue with shareholders throughvarious opportunities.
(i) IR system
The Company has promoted IR activities in cooperation with the Corporate Planning Department and the
Public Relations & Investor Relations Department, with Representative Director, Senior Managing Executive
Officer in charge of corporate planning and management serving as manager. In addition, the Company
receives cooperation from internal related departments such as the Finance and Accounting Department andthe Sales Headquarters in preparing disclosure materials.
(ii) Method of having dialogues
In addition to the general meeting of shareholders, the Company holds financial results briefings twice a year,
individual meetings for each quarterly settlement, and other opportunities for communication withshareholders and investors to explain our management conditions and business activities and the progress of
the Medium-Term Management Plan. The Company will continue to actively disclose information andenhance opportunities for communication.
The Company respects the purpose and meaning of the fair disclosure rules when having a dialogue withshareholders and investors and engages in positive and fair IR activities. The Company also ensures theprevention of leakage of insider information and has established the Regulations for Management of Important
Information and Prevention of Insider Trading of Share Certificates, Etc. to thoroughly manage insider
information.

-5-

(iii) Sharing feedback within the Company
Main opinions and management issues received from shareholders and investors through IR activities arereported to senior management members, the Board of Directors, and others, and used to improve themanagement of the Company.
[Measures to realize management that is conscious of capital costs and stock prices] [Disclosed in English]
In the third medium-term management plan, our company has set a financial target of achieving ROE: 8.0%
or more by the final year (FY2025).
The Company believes that by achieving this goal, the Company will exceed the cost of stockholders’ equity
and lead to a sustainable increase in corporate value.
In addition, the Board of Directors conducts an analysis of the current situation regarding capital costs andstock prices, and discloses specific initiatives and medium- to long-term policies based on these.
For details, please check our website.
• Action to Implement Management that is Conscious of Cost of Capital and Stock Pricehttps://www.cflogi.co.jp/uploads/info20240315-2.pdf-6-

2. Capital Structure
Foreign Shareholding Ratio[Status of Major Shareholders] Updated
Name / Company Name
The Master Trust Bank of Japan, Ltd.
(Account in Trust)
KYODO MILK INDUSTRY CO., Ltd.
Maruha Nichiro Corporation
Chilled and Frozen Logistics Holdings
Employee Stock Ownership Plan
The Norinchukin Bank
The Kyoei Fire and Marine Insurance
Company, Limited
Chilled and Frozen Logistics Holdings
Trading Partner Stock Ownership Plan
JA MITSUI LEASING, LTD.
Masaru Wasami
Custody Bank of Japan, Ltd.(Account inTrust)
Controlling Shareholder (except for Parent
Company)
Parent Company

Less than 10%

Number of Shares Owned

Percentage (%)
2,090,400

9.64

1,491,900
1,175,800

6.88
5.42

863,127

3.98

851,080

3.92

842,455

3.88

831,740

3.83

746,816
728,400

3.44
3.36

623,400

2.87

–
None

Supplementary Explanation Updated
1. The Company has 4,019,772 treasury shares, which are excluded from the above list. The shareholding
ratio above is calculated excluding the said number of treasury shares.
2. The treasury shares above do not include 113,800 shares of the Company owned by Sumitomo Mitsui Trust
Bank, Limited (sub-trustee: Custody Bank of Japan, Ltd.) established for performance-linked stockcompensation plan.
3. The shareholding ratio above is rounded to the second decimal place.
4. The above list presents the status based on the shareholder registry as of March 31, 2024.

3. Corporate Attributes
Listed Stock Market and Market Section

Tokyo Stock Exchange (Prime)

Fiscal Year-End

MarchType of BusinessLand transportation

Number of Employees (consolidated) as of
the End of the Previous Fiscal YearSales (consolidated) as of the End of thePrevious Fiscal Year
Number of Consolidated Subsidiaries as of
the End of the Previous Fiscal Year

1000 or more
100 billion yen or more but less than 1 trillion yen
10 or more but less than 50-7-4. Policy on Measures to Protect Minority Shareholders in Conducting Transactions with Controlling
Shareholder–

5. Other Special Circumstances that may have Material Impact on Corporate Governance–-8-II. Business Management Organization and Other Corporate Governance Systems regarding
Decision-making, Execution of Business, and Oversight in Management
1. Organizational Composition and Operation
Company with Audit and Supervisory Committee

Organization Form
[Directors]
Maximum Number of Directors Stipulated in
Articles of Incorporation
Term of Office Stipulated in Articles ofIncorporation

17
One year

Chairperson of the Board

President

Number of Directors

10

Status of Appointment of Outside Directors

Appointed

Number of Outside Directors

6

Number of Independent Directors

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

Relationship with the Company*
a

b

c

d

e

f

g

h

i

j

k

Akihiro Mizutani
From another company
Takeshi Tanaka
From another company
Kenichi Sugita
From another company△
Nobuyuki Takagi
From another company
Michiho Tachi
LawyerShiro Toba
CPA
* 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 an officer
g. 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 Outside Officers are mutually appointed (theDirector himself/herself only)
j. Executive of a company or organization that receives a donation from the Company (the Director
himself/herself only)
k. Others-9-Outside Directors’ Relationship with the Company (2) Updated
Designationas
Independent
Director

Supplementary
Explanation of
the RelationshipAkihiro Mizutani○–

Takeshi Tanaka

○

–

Name

Kenichi Sugita

Membershipof Audit andSupervisory
Committee○

Mr. Kenichi
Sugita was an
employee of The
Norinchukin
Bank that is amain shareholder
and a main
trading bank of
the Company,
and theCompany’s
borrowings fromthe bank accountforapproximately
38.7% of all
borrowings of
the Company.
Accordingly, theCompany has
determined thathe lacks
independence.

- 10 -

Reasons for Appointment
Mr. Akihiro Mizutani has longextensive experience and deep
insight as top management of afood manufacturer and provides
advice for improvement of logistics
and other recommendations toensure the validity andappropriateness of decision-making
by the Board of Directors. The
Company believes that as an
Outside Director he will continue
to utilize his experience andknowledge to realize themanagement plan envisioned by
the Group and contribute toenhancing the decision-making andsupervisory functions of the Boardof Directors.
Mr. Takeshi Tanaka has longextensive experience and deep
insight in corporate planning andoverseas business, in addition to a
wealth of accomplishments andexperience as a corporate executive
over many years. He has provided
accurate suggestions and advice
from an objective and professional
perspective to realize themanagement plan envisioned by
the Group. The Company believes
that as an Outside Director he willcontribute to enhancing thedecision-making and supervisory
functions of the Board of Directors.
Mr. Kenichi Sugita has longexperience and extensive
knowledge in financial institutions
and plays an appropriate role indecision-making and supervision ofbusiness execution from a neutral
and objective standpoint. He also
serves as Audit and Supervisory
Board Member of major operatingcompanies, contributing tostrengthening the governance of theGroup. Based on these factors, theCompany believes that he willcontinue to contribute to theimprovement of soundness,transparency, and compliance in the
management of the Group.

Nobuyuki Takagi

○

○

–

Michiho Tachi

○

○

–

Shiro Toba

○

○

–

Mr. Nobuyuki Takagi has expert
knowledge of the relevant laws andregulations of listed companies
based on his extensive work
experience as an outside officer at asecurities company and othercompanies. He also plays anappropriate role in decision-making
and supervision of businessexecution from a neutral andobjective standpoint based on the
broad knowledge he has gained
from his experience as a university
lecturer. He will continue to play animportant role in strengthening thesoundness and transparency in the
management of the Group andfurther enhancing the corporate
governance system based on theinsights he has gained in various
fields. In addition, the Company
believes that he will contribute toimproving compliance.
Ms. Michiho Tachi has sufficientinsight in corporate legal affairs
based on her expert knowledge andexperience as an attorney and plays
an appropriate role in decisionmaking and supervision of businessexecution from a neutral andobjective standpoint. The Company
believes that her expertise in legal
matters will contribute toimproving the soundness,transparency, and compliance in the
management of the Group.
Mr. Shiro Toba has a wide range ofknowledge based on his extensive
work experience as a certified
public accountant and an officer ofother companies and plays anappropriate role in decision-making
and supervision of businessexecution from a neutral andobjective standpoint. The Company
believes that his expertise inaccounting will contribute toimproving the soundness,transparency, and compliance in the
management of the Group.

[Audit and Supervisory Committee]
Committee’s Composition and Attributes of Chairperson
All Committee
Members
Audit andSupervisory
Committee

4Full-timeMembers

InsideDirectors

OutsideDirectors

1

0

4

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

Appointed- 11 -

Chairperson
Outside Director

Matters Related to the Independence of Such Directors and/or Staff from Executive Directors
The Company has set up the Audit and Supervisory Committee Office as a department to only assist duties of
the Audit and Supervisory Committee and assigned dedicated employees. To ensure the independence of the
Audit and Supervisory Committee Office, the Company obtains the prior consent of the Audit and Supervisory
Committee for the appointment and transfer of the staff members of the Office and other personnel matters,
and also conducts personnel evaluation with the consent of the full-time Audit and Supervisory Committee
member.

Cooperation among Supervisory Committee, Accounting Auditors and Internal Audit Department
The Audit and Supervisory Committee is in close coordination with Ernst & Young ShinNihon LLC, theCompany’s accounting auditor, by regularly exchanging information and opinions with them and receiving
audit results from them. The Company has a system where the internal control department and the Audit
Office regularly conduct internal audits of operating departments and subsidiaries while coordinating theirfunctions with the Audit and Supervisory Committee, and report the results of the audit and matters to be
improved.
[Voluntary Establishment of Nomination/Compensation Committee]
Voluntary Establishment of Committee(s)Corresponding to Nomination Committee or
EstablishedCompensation Committee
Committee’s Name, Composition, and Attributes of Chairperson

Committee’s Name

Committee Corresponding toNomination Committee
Nomination Committee

Committee Corresponding toCompensation Committee
Compensation Committee

All Committee Members

7

7

Full-time Members

00Inside Directors

11Outside Directors

66Outside Experts

0

0

Other

0

0

Outside Director

Outside Director

Chairperson
Supplementary Explanation

Establishment of the Nomination Committee and the Compensation Committee
The Company has voluntarily established the Nomination Committee for the purposes of mainly ensuring thetransparency and objectivity of the appointment process of Directors and avoiding concentration of authority
over personnel issues into Representative Directors, and the Compensation Committee for the purposes ofprimarily ensuring the transparency and objectivity of the decision-making process of compensation for theCompany’s officers and ensuring decision-making and the rationality of the basic policy of officers’
compensation system. To ensure transparency, a majority of members of both committees are outside officers,
and the chairpersons of both committees are Outside Directors.

- 12 -

[Independent Directors]
Number of Independent Directors

5

Matters relating to Independent Directors
The Company designates five Outside Directors out of six as Independent Directors who satisfy thequalifications of Independent Directors.

[Incentives]
Incentive Policies for Directors

Performance-linked compensation

Supplementary Explanation
At the 5th Annual General Meeting of Shareholders held on June 25, 2020, a resolution was approved to
introduce the performance-linked share compensation scheme.

Recipients of Stock Options–

Supplementary Explanation–[Director Compensation]
Disclosure of Individual Directors’Compensation

No individual disclosure

Supplementary Explanation Updated
The total amount of compensation, etc. for Directors for the immediately preceding fiscal year is as follows:• The total amount of compensation, etc. for Directors (excluding Audit and Supervisory Committee
Members) is 115 million yen (of which 12 million yen is for Outside Directors)
Total compensation, etc. by classification: Basic compensation: 66 million yen (of which 12 million yen
is for Outside Directors)
Performance-linked compensation, etc.: 33 million yen
Non-monetary compensation, etc.: 15 million yen• The total amount of compensation, etc. for Directors (Audit and Supervisory Committee Members) is 37
million yen (of which 37 million yen is for Outside Directors): Basic compensation: 37 million yen (of which 37 million yen
is for Outside Directors)

Policy on Determining Compensation Amounts
and Calculation Methods Updated

Established- 13 -

Disclosure of Policy on Determining Compensation Amounts and Calculation Methods
As stated in “Matters Regarding Policies for Determining Contents of Individual Directors’ Compensations,etc.” and “Matters Regarding Resolutions of Shareholders Meeting on Directors’ Compensations, etc.,” “4.
Compensation, etc. for Directors for FY 2023,” “III. Company Officers” of the Business Report in the
Notice of the Convocation of the 9th Annual General Meeting of Shareholders(https://www.cflogi.co.jp/uploads/info20240605-3.pdf)[Supporting System for Outside Directors]
The General Affairs Department and the Audit and Supervisory Committee Office have the leading role inproviding administrative support to Outside Directors for their daily work, and can seek cooperation fromrelevant departments, as necessary. In addition, the Company has a system in place to support Outside
Directors for important proposals at a meeting of the Board of Directors and other meetings, as necessary, bymeans such as providing prior explanation and supplementary materials.

2. Matters on Functions of Business Execution, Auditing, Oversight, Nomination and Compensation
Decisions (Overview of Current Corporate Governance System)(1) Board of Directors
The Company’s Board of Directors consist of 10 Directors. The Company has six Outside Directors, out of
which four are Directors who are Audit and Supervisory Committee Members. The Board of Directors meetsat least once a month, in principle, and makes decisions, as the highest decision-making body, on mattersprescribed by laws and regulations and the Articles of Incorporation and other matters. The Board of Directors
is operated by nine male Directors and one female Director.
(2) Executive Officers’ Meeting
The Company holds at least one Executive Officers’ meeting in which full-time Directors and Executive
Officers participate each month, in principle. At an Executive Officers’ meeting, participants deliberate on
matters entrusted by the Board of Directors and important management matters, and work to clarify thedecision-making process of proposals submitted to the Board of Directors and ensure transparency thereof.
(3) Audit and Supervisory Committee
The Company’s Audit and Supervisory Committee consists of four Outside Directors who are Audit andSupervisory Committee Members (three males and one female), and audits and supervises overallmanagement, leveraging the members’ experience, expertise, etc. from an independent standpoint. The Audit
and Supervisory Committee has a system to fully supervise all aspects of Directors’ execution of duties by
having the full-time Audit and Supervisory Committee Member attend all meetings such as Executive
Officers’ meetings at which important matters related to management are deliberated on and determined, andinspecting requests for approval and various reports for daily work. In addition, the Company has ensured theeffectiveness of instructions of Audit and Supervisory Committee Members by having a cooperative system
in place between the Audit and Supervisory Committee Office and each department, and conducting
investigation and collecting information necessary for audit.
(4) Establishment of the Nomination Committee and the Compensation Committee
The Company has voluntarily established the Nomination Committee for the purposes of mainly ensuring thetransparency and objectivity of the appointment process of Directors and avoiding concentration of authority
over personnel issues into Representative Directors, and the Compensation Committee for the purposes ofprimarily ensuring the transparency and objectivity of the decision-making process of compensation for theCompany’s officers and ensuring decision-making and the rationality of the basic policy of officers’
compensation system. To ensure transparency, a majority of members of both committees are outside officers,
and the chairpersons of both committees are Outside Directors.

- 14 -

(5) Accounting Auditor
The Company has entered into an audit agreement with Ernst & Young ShinNihon LLC., which performs
audits of accounting and internal control over financial reporting from an independent and impartial
standpoint.
(6) Internal Audit
The Company has established the Audit Office as the internal audit department. The Audit Office performs
audits of the Company and the Group companies to ensure that business operations are being conducted in an
appropriate manner.

- 15 -

3. Reasons for Adoption of Current Corporate Governance System
The Company has adopted a system of a company with Audit and Supervisory Committee as resolved at the
4th Annual General Meeting of Shareholders held on June 26, 2019 to exhibit the effectiveness of its corporate
governance system. The Company has improved the effectiveness of auditing and supervision throughauditing by Directors who are Audit and Supervisory Committee Members with voting rights on the Board of
Directors, and increased the ratio of Outside Directors by continuously bringing in talented human resources
to further strengthen the supervisory function of the Board of Directors. The Company also has delegated allor part of decision-making on execution of important business to Directors so that the Board of Directors canmake decisions quickly.

III. Implementation of Measures for Shareholders and Other Stakeholders
1. Measures to Vitalize the General Shareholder Meetings and Smooth Exercise of Voting Rights
UpdatedEarly Notification of General
Shareholder Meeting
Allowing Electronic Exerciseof Voting Rights
Participation in Electronic
Voting Platform
Providing Convocation Noticein English
Other

Supplementary Explanations
The Company sends and discloses a convocation notice and materials of ageneral meeting of shareholders earlier than the statutory due date to give
shareholders sufficient time to review the agenda.
The Company has adopted a system for exercising voting rights via theInternet.
The Company has participated in the electronic voting platform for
institutional investors operated by ICJ, Inc.
The Company translates its convocation notices into English and posts thetranslated notices on the English version of our website(https://www.cflogi.co.jp/en/) and the website of the Tokyo Stock Exchange.
Slide presentation of shareholder meeting materials.

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

Supplementary Explanations
The Company regularly holds financial results briefings after the release of
year-end financial results and the financial results for the second quarter of
each fiscal year.
The Company posts summaries of financial results (including quarter
financial results), financial results presentations, disclosure documents otherthan financial results, notices of general meetings of shareholders, annual
securities reports (including quarterly reports), corporate governance reports,
shareholder special benefit information, stock price information, etc. on our
website (https://www.cflogi.co.jp/en/) (some of the above information isprovided only in Japanese).
The Company has established the Public Relations & Investor Relations
Department.

- 16 -

3. Measures to Ensure Due Respect for Stakeholders
Stipulation of Internal Rules
for Respecting the Position of
Stakeholders
Implementation ofEnvironmental Activities, CSR
Activities etc.

Supplementary Explanations
The Company has established the Human Rights Policy and disclosed it on
our website (https://www.cflogi.co.jp/en/company/policy.html#policy-2).
The Company has established the Sustainability Policy and identified
materiality (important issues). The status of individual initiatives is disclosed
on our website (https://www.cflogi.co.jp/en/sustainability/).

IV. Matters Related to the Internal Control System
1. Basic Views on Internal Control System and the Progress of System Development
The following outlines the systems to ensure that the execution of duties by Directors complies with laws andregulations and the Articles of Incorporation, and other systems to ensure the appropriateness of business
operations of the Company.
1. Basic policy
A group of enterprises consisting of the Company and its subsidiaries (the “Group”) considers that developing
and operating an internal control system is an important management issue for the purpose of ensuring theappropriateness, effectiveness and efficiency of business operations to maintain and increase corporate value
and improving business performance by ensuring social credibility and further enhancing the function andquality of logistics for food products. The Group will work to establish an internal control system for all
officers, employees and workers at offices of the Group based on the following basic policy.
(1) Systems to ensure that Directors’ and employees’ execution of duties complies with laws and regulations
and the Articles of Incorporation(i) The Company shall regularly hold a meeting of the Board of Directors each month in accordancewith the Regulations for the Board of Directors to promote communication among Directors andprevent a breach of laws and regulations and the Articles of Incorporation by having Directors
supervise execution of their duties each other.
(ii) The Company shall establish the Code of Ethical Conduct as the standards of conduct to becomplied with by all officers and employees of the Group, and work to ensure that all officers andemployees of the Group are fully aware of it.
(iii) The Company has established a whistleblowing system where a person who is aware of an actualand threatened breach of laws and regulations and other rules by an officer, employee or worker of
the Group can report it to the Whistleblowing Committee Office. The Company shall establish asystem to promptly report the whistleblowing contents to the Audit and Supervisory Committee.
(iv) The Company shall establish an internal audit system where the Audit Office independent of thebusiness execution departments conducts internal audits of the Group and checks the status ofcompliance with laws and regulations and internal rules.
(2) Systems for storage and management of information regarding execution of duties by Directors(i) The Company shall store minutes of important meetings, including minutes of meetings of theBoard of Directors and other documents such as requests for approval pursuant to laws andregulations and internal rules.
(ii) The Company shall establish the Information Security Policy for electric records and clarify theguidelines to handle such records.
(iii) The Company shall establish a system where Directors can access the information set forth above.
(3) Regulations and other systems relating to management of the risk of loss of the Company and its
subsidiaries(i) The Company shall set up the Risk Management Committee chaired by the President, and establish
systems and policies regarding risk management, as well as assess risk management systems of theGroup’s departments, and improve them, if necessary.
- 17 -

(ii)The Company shall identify and assess risks associated with business operations of departments
and develop rules and regulations related to the avoidance and mitigation of those risks.
(iii) If a serious risk occurs or is threatened to occur at the Company or a subsidiary, the Emergency
Headquarters with the President serving as the chief shall take action.
(iv) If a subsidiary finds any misconduct or material fact in violation of laws and regulations, theArticles of Incorporation or internal rules or any other fact raising concerns in terms of risk
management, Directors of the subsidiary shall report such fact to Directors of the Company and the
Audit and Supervisory Committee.
(4) Systems to ensure the efficient execution of duties by Directors(i) To ensure the efficient execution of duties by Directors, the Company shall hold a meeting of theBoard of Directors each month and supervise the decision-making of important matters and thestatus of execution of duties by Directors (excluding those who are Audit and Supervisory
Committee Members), among other things.
(ii) The Company shall approve the Group companies’ important matters that require approval inaccordance with the official authority table prescribed in the Decision-Making Regulations.
Matters other than those to be resolved by the Board of Directors shall be resolved at an Executive
Officers’ meeting.
(5) Systems to ensure the appropriateness of business operations of the Group companies(i) The Company shall receive reports from the Group companies on the status of their management
at a regular business results briefing session.
(ii) The Company shall give its subsidiaries directions to clarify the authority and responsibilities of
persons who execute business for their decision-making and ensure that business is executed
systematically and efficiently in accordance with their Regulations for the Board of Directors,
Regulations for Official Authority, and other various rules and regulations.
(iii) The Company provides the Group companies with education on compliance, transport safety, etc.
(iv) The Company’s Audit Office conducts a business audit of the Company’s departments andsubsidiaries and reports the status and results of the audit to the Company’s Board of Directors andother relevant organizations according to the importance thereof. Following the report, theCompany shall instruct and support the methods of executing business of the subsidiaries.
(6) Matters regarding employees who assist the duties of the Audit and Supervisory Committee and ensuring
their independence and the effectiveness of instructions(i) The Company shall establish the Audit and Supervisory Committee Office if necessary to assist theduties of Directors who are Audit and Supervisory Committee Members. Personnel mattersregarding assistants shall be discussed by Directors (excluding those who are Audit andSupervisory Committee Members) and Directors who are Audit and Supervisory Committee
Members, as necessary.
(ii) To ensure the independence of the Audit and Supervisory Committee Office, personnel matterssuch as appointment, transfer, etc. of staff of the Audit and Supervisory Committee Office requireprior consent of the Audit and Supervisory Committee. Personnel evaluation also requires consent
of the full-time Audit and Supervisory Committee Member.
(7) Systems for reporting to the Audit and Supervisory Committee and other systems to ensure effective
performance of audits by the Audit and Supervisory Committee(i) If a Director or employee of the Group discovers a fact that would cause material damage to theCompany, such Director or employee shall promptly report such fact to the Audit and Supervisory
Committee. Any unfavorable treatment of the whistleblower shall be prohibited.
(ii) Directors who are Audit and Supervisory Committee Members shall attend important meetings
such as Executive Officers’ meetings, in addition to meetings of the Board of Directors, and express
their opinions, as necessary.
(iii) Directors who are Audit and Supervisory Committee Members shall inspect various requests forapproval and other documents related to business execution and seek explanation from Directors(excluding those who are Audit and Supervisory Committee Members) and employees, asnecessary.

- 18 -

(vi) Any whistleblowing shall be reported to the Audit and Supervisory Committee pursuant to thewhistleblowing system.
(8) Matters regarding policies on treatment of audit expenses, etc.
To ensure that audit activities are conducted from an independent standpoint, the Audit and Supervisory
Committee may retain external professionals such as lawyers, as necessary, and charge the Company for
expenses to retain such professionals.
(9) Systems to eliminate anti-social forces(i) The Group shall not have any relationship with anti-social forces that threats the safety and orderof civil society. If an event occurs such as receiving unreasonable demand from an anti-social force,the General Affairs Department shall be responsible to supervise actions, centrally manage andcollect information, and respond to such event in a firm attitude in cooperation with lawyers andrelevant institutions such as the competent police station.
(ii) To prevent occurrence of an event, the Company shall regularly provide training, develop responsemanuals, and build a close relationship with the competent police station even in normal
circumstances by exchanging information with them.
(iii) The provisions for elimination of anti-social forces must be included in the terms of agreements
and the terms and conditions of transactions executed during the course of daily business activities.
(10) Systems to ensure the reliability of financial reports
The Company shall develop an internal control system for submission of valid and appropriate internal control
reports pursuant to the Financial Instruments and Exchange Act, and continuously evaluate whether such
system properly works and correct any defect in such system in accordance with the Implementation Standards
for Evaluation of Internal Control over Finance Reporting separately established.

2. Basic Views on Eliminating Anti-Social Forces(1) In order to fulfill its corporate social responsibilities, the Group shall actively collect information on antisocial forces and eliminate all relationships with them, including normal transactions. The Group shallalso refuse any demand from anti-social forces such as demand for funds. This is declared in the Basic
Policy on Internal Control System.
(2) The General Affairs Department shall represent the Group to respond to matters related to anti-social
forces and work to eliminate anti-social forces.
(3) The Group has collected information and considered measures for elimination of anti-social forces incooperation with lawyers, relevant institutions such as the competent police station, and other external
professional institutions.
(4) The provisions for elimination of anti-social forces shall be included in the terms of agreements and theterms and conditions of transactions executed during the course of daily business activities.

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

Not adopted

Supplementary Explanation
The Company has not adopted anti-takeover measures.

- 19 -

2. Other Matters Concerning to Corporate Governance System(1) Corporate governance system
The Company has monitored the status of development and operation of an internal control system, andworked to improve it based on the results of the monitoring.
(2) Timely disclosure system
The Company’s basic policy is to promptly disclose accurate and fair information to shareholders andinvestors. The information management supervisor receives material facts from operating companies andrelevant departments and the Company confirms whether timely disclosure is required by the Securities
Listing Regulations and discloses determined facts, information on financial results, and occurred facts.
(Determined facts and information on financial results)
The information management supervisor collects and summarizes information on determined facts andinformation on financial results and reports to Representative Directors and the Board of Directors after
confirming such information with the Accounting Auditor, its corporate lawyer, etc., as necessary. If theCompany determines that it is required to make timely disclosure, it will promptly take procedures to makesuch disclosure.
(Occurred facts)
The Company always collects information in cooperation with operating companies and the Group
companies. If a material fact occurs, the information management supervisor collects and summarizes
information and confirms it with the Accounting Auditor, its corporate lawyer, etc., as necessary, and reports
to Representative Directors. If the Company determines that it is required to make timely disclosure, it willpromptly take procedures to make such disclosure.

- 20 -

- 21 -