Corporate Governance Guidelines

The Board of Directors (the “Board”) of SEPTENI HOLDINGS CO., LTD. (the “Company”) has
adopted these Corporate Governance Guidelines (the “Guidelines”) as a form of governance framework for
the Septeni Group (the “Group”). The Group’s governance system is structured to ensure that actions are
based on the Group's Corporate Philosophy and decisions are made in a transparent, fair, and efficientmanner, and that appropriate supervision (monitoring) of both legal compliance and corporate performanceare carried out.

1
1.1

Corporate Philosophy
Corporate Philosophy
The Group has the following messages as its corporate philosophy.
・ Mission

To inspire the world with entrepreneurship・ Vision

To be a place where people are empowered to create a new era
To open the door to a “nameraka” future with creativity and technology
To make a complex world bright and simple through the power of digital*open: The Group aims to make the door bigger so that people can move forward smoothly into the future it pursues.
*“nameraka”: The Group defines “nameraka” as a harmonious state without friction and barriers.

・ CreedHinerankai“Hinerankai,” a Kansai dialect, means “Think outside the box.”

・ Value

1.2

Resilient, Caring, Exciting

Evaluation of Corporate Philosophy

The Board periodically (once a year) evaluates whether the Corporate Philosophy has permeated thefrontline of the Group’s business activities and contributed to the enhancement of corporate value.

2
2.1

Code of Conduct
Code of Conduct

The Group acts on the basis of governance based on the Corporate Philosophy, and in conjunction
with the following.
“Dentsu Group Code of Conduct”
https://www.group.dentsu.com/en/about-us/governance/codeofconduct.html

2.2

Evaluation of Code of Conduct

The Board periodically (once a year) evaluates whether the Code of Conduct has permeated andpracticed on the front lines of the Group's business activities.

3

Medium-term Business Policies and Capital Efficiency Indicators

3.1

Medium-term Business Policies

The Group formulates Medium-term Business Policies based on a rolling method that is reviewed ona single-year basis. The Company also actively considers setting targets linked to non-financial informationin its Medium-term Business Policies.

3.2

Capital Efficiency Indicators

The Group does not introduce ROE indicators as indicators of capital efficiency. Its target is toachieve the budget plans for revenue and Non-GAAP operating profit in its Medium-term Business Policies.

4
4.1

Capital Policy and Shareholder Return Policy
Principle of Capital Policy

The fundamental principle of the Group’s capital policy is to maintain an optimal capital structurethat ensures financial soundness and flexibility while improving capital efficiency in order to achievesustained increases in corporate value and thereby increase shareholder returns.

4.2

Principle of Shareholder Return Policy

The Board, in principle, pays dividends of surplus with a target dividend payout ratio of around 25%
to profit attributable to owners of parent in consideration of its consolidated earnings performance, thestrengthening of the financial position, the Group’s business strategy going forward and other factors. In
addition, by setting a minimum annual dividend per share, the Board considers the continuity and stability of
dividends, while maintaining a focus on appropriate profit distribution in line with business growth.
Furthermore, the Board will flexibly implement share repurchase.

55.1

Dialogue with Shareholders and Operation of General Meeting of Shareholders
Record Date of Voting Rights and Date of Ordinary General Meeting of Shareholders

In order to enhance constructive dialogue with shareholders and provide accurate information at theOrdinary General Meeting of Shareholders, the Company sets the record date of voting rights as December
31 of each year, and the Ordinary General Meeting of Shareholders will be held on the avoidance of the peakdate of March.

5.2

Appropriate Provision of Information to General Meeting of Shareholders

In order to help shareholders make appropriate decisions at the General Meeting of Shareholders, theCompany devises and enhances the description of the convocation notice for the General Meeting of
Shareholders (e.g., coloring, enlargement, charting, English translation).

5.3

Date of Delivery of Convocation Notice for General Meeting of Shareholders

The Company ensures a minimum of 20 days or more between the date of the General Meeting of
Shareholders and the date of delivery of the convocation notice in order to enhance constructive dialogue
with shareholders at the General Meeting of Shareholders and to ensure a period of consideration byshareholders.

5.4

Prior Publication of Convocation Notice of General Meeting of Shareholders

In order to enhance constructive dialogue with shareholders at the General Meeting of Shareholders
and to ensure a period of consideration by shareholders, the Company announces it in advance on TDnet andits website prior to the delivery of the convocation notice. (Target: 30 days prior to the General Meeting of
Shareholders)

5.5Electronic Voting by Shareholders

Based on the ratio of institutional investors and foreign investors, the Company introduces theexercise of voting rights by electronic means and participates in the electronic voting platform (ICJ).

5.6

Exercise of Voting Rights by Institutional Investors etc. at General Meeting of Shareholders

The Company consults and considers with trust banks, etc. if institutional investors, etc. holding its
shares in the name of trust banks, etc. wish to exercise their voting rights on behalf of trust banks, etc. at theGeneral Meeting of Shareholders.

5.7

Policy for Dialogues with Shareholders

The Company responds to constructive dialogue with shareholders outside of the General Meeting of
Shareholders as follows.

5.8

(1)

With regard to applications for dialogue from shareholders, the Company will decide whether or
not it is necessary to respond individually and specifically, based on the main matters of interestin the interview and the number of shares held.

(2)

In principle, the CEO Office is the contact point for dialogue with shareholders, and the Group
President and Chief Executive Officer, and other management engage in interviews depending on
specific circumstances of each case. In addition, when shareholders apply for a dialogue with theCompany’s outside directors and corporate auditors, the Company does its utmost to create aplace for interviews, depending on specific circumstances of each case.

Appropriate Information Disclosure

The Company appropriately discloses financial information related to the Group’s financial position
and results of operations, as well as management strategies and issues, non-financial information related to
its initiatives for sustainability, including risks, governance, environment, and CSR, in accordance with laws
and regulations. The Company also proactively provides information through appropriate methods, including
the utilization of integrated reports and the enhancement of descriptions on its corporate website.

5.9 Maintaining Independence and Autonomy
As a listed company, the Company maintains its independence and autonomy (including
independence and autonomy with respect to management, business, business relationships, and brand) with
its parent company, Dentsu Group Inc. In addition, Dentsu Group Inc. and group companies other than
Dentsu Group Inc. will not acquire additional shares of the Company, without obtaining the Company’s priorwritten approval, except to the extent that it maintains a 52.01% voting interest in the shares held by Dentsu
Group Inc.

6
6.1

Response to Large-scale Purchases
Takeover Defenses

The Board does not introduce so-called “takeover defenses” that are introduced before a takeover by
a person that is not favorable to management is initiated.

6.2 Measures to Be Taken When Persons Intends to Conduct Large-Scale Purchases
The Board endeavors to proactively collect information and disclose information (the Board’s
perspective) in a timely manner and takes appropriate measures within the permissible scope of the relevantlaws and regulations and the Company’s Articles of Incorporation from the viewpoint of securing thecorporate value of the Group and the common interests of its shareholders when a person who intends toengage in a large-scale purchase appears.

7
7.1

Policy on Cross-shareholdings and Criteria for Exercising Voting Rights
Policy for Ownership of Listed Shares, etc.
The Group has the following policy and ensures the economic rationality of holding listed shares, etc.
(1) Cross-shareholdings as a mere stable shareholder is not done from the viewpoint of corporate
governance.
(2) The ownership of shares is limited to cases in which it is judged that it will contribute to themaintenance and improvement of the Group’s corporate value, such as cases in which there are
merits in the execution of business, while also taking into account returns such as dividends.
(3) Shares held are periodically examined, and shares judged to have little significance for holding aresold.
(4) The Company fulfills its stewardship responsibilities as a responsible investor through engagement
for investments in which the Group has a high percentage of voting rights.

7.2

Criteria for Exercising Voting Rights of Held Shares

The Group has the following policy and ensures economic rationality for the exercise of voting rights oflisted shares, etc.
(1) The Company exercises voting rights on all proposals in principle, in order to properly exercise its
rights as a shareholder.

(2) In exercising voting rights, the Company appropriately decides whether or not to approve each
proposal based on the perspective of enhancing the Group’s corporate value in addition to theperspective of enhancing the medium to long term corporate value of investee companies.
(3) The Company conducts constructive dialogue with investee companies when necessary, such asconfirming the purpose of proposals.

8
8.1

Approach to the Board of Directors
Responsibilities of the Board of Directors

Based on its responsibilities to shareholders, the Board assumes the following responsibilities inorder to promote the Group’s sustainable growth and the enhancement of corporate value over the medium tolong term, and to improve profitability, capital efficiency, etc.
(1) To show the major direction of basic management policy, etc.
(2) To develop an environment that supports appropriate risk-taking by management(3) To Conduct highly effective supervision (monitoring) of management’s business execution from an
independent and objective standpoint

8.2

Roles of Outside Directors

The Board appoints multiple outside directors who are highly independent and have high levels of
experience and insight into management. Through deliberations, the Board establishes a system that enables
it to make decisions on basic management policies and oversee business execution effectively andefficiently.

8.3

Monitoring Board

By delegating the authority for decision-making and execution of business operation to executive
officers (the “Group Executive Officers”) to the extent permitted by relevant laws and regulations, the Board
is oriented toward the board type referred to as the so-called monitoring model, which focuses primarily onsupervision (monitoring) of the Group Executive Officers.

8.4

Group Management Meeting

The Board has the Group Management Meeting in addition to the Board of Directors as thecommittee body that makes basic decisions on the Group. The Group Management Meeting, with theparticipation of all Group Executive Officers, supports the decision-making of the Group President and Chief
Executive Officer, who is the Chief Executive Officer of the Group, deliberates and decides on importantmanagement matters for the Group within the scope delegated by the Board, and shares information on
business execution.

8.5

Holding of the Board of Directors and Group Management Meeting

The Board of Directors is held once a month, the Group Management Meeting is held twice a month,and extraordinary meetings are held as necessary.

Directors and Group Executive Officers are expected to prepare for and attend their respective
meetings and take the necessary time for them to appropriately execute their duties as directors and Group
Executive Officers.

8.6

Matters to be Resolved at the Board of Directors

Regarding matters to be resolved at the Board of Directors and matters to be delegated authority to
the Group Executive Officers or the Group Management Meeting, the Board formulates Appendix Table 1“Criteria for Resolution and Delegation of the Board of Directors and Executive Officers” of the Regulationsof the Board of Directors to clarify authority and responsibility.

8.7

Matters to be Reported to the Board of Directors

In order to make the supervision (monitoring) of business execution by the Board effective, withregard to matters reported to the Board, the Board formulates Appendix Table 2 “Criteria for Reportable
Matters” in the Regulations of the Board of Directors and clarify the reporting obligations of the Group
Executive Officers in charge.
The Board requires periodic reports (at least once every three months) on matters for which authority
has been delegated to the Group Executive Officers in charge.

8.8

Representative Director

The Group’s Representative Director shall be a director who is not the Company’s outside director,
and a director appointed by Dentsu Group Inc., the Company’s parent company.

99.1

Independent Outside Director
Independence

Outside directors must meet the “Standards for the Independence of Outside Officers” stipulated by
the Board. (the “Independent Outside Directors”)

9.2

Number of Outside Directors
As the Company’s policy, the Board consists of at least a majority of Independent Outside Directors.

9.3

Regular Meetings of Independent Outside Directors, etc.

The Board sets regular meetings (executive sessions) consisting solely of independent outside
directors once a month in principle, to ensure that there is a forum for exchanging information and sharing
awareness regarding the management of the Group, the activities of the Board, and succession plans for
management. This meeting also allows for the participation of independent outside persons such as outside
auditors and external accounting auditors, and also be used as a forum for cooperation between independent
outside persons.

9.4

Provision of Information

Independent Outside Directors are continuously provided through the Secretariat of the Board withinformation on the Company’s management environment, corporate philosophy, risk information, etc.
necessary to fulfill their roles and responsibilities, and are also able to seek the advice of outside experts at
the Company’s expenses as necessary.

9.5

Restrictions on Concurrent Positions

There are no restrictions on concurrent positions of other listed companies of independent outside
directors.

10
10.1

Management Remuneration
Unified Remuneration System to Support Appropriate Risk-taking

Through the remuneration system, the Board, in principle, establishes a unified remuneration system(the “group management remuneration”) so that appropriate risk-taking and entrepreneurship can bedemonstrated by the Group’s key management, such as directors and Group Executive Officers, etc.

10.2

Clarification of Remuneration Decision Policy

The Board formulates the “Group Management Remuneration Decision Policy” as a policy for
determining the group management remuneration. The Group Management Remuneration Decision Policy
appropriately establishes the proportion of compensation linked to medium to long term performance, as wellas the proportion of cash compensation to share-based compensation, as well as short-term incentives linked
to performance each fiscal year.

10.3

Ensuring Fairness of Procedures for Determining Remuneration

In determining the specific amount of remuneration, the decision is made with reference to theopinions of independent outside directors based on the Group Management Remuneration Decision Policy.

10.4

Timing of Revision of Remuneration

The timing of revisions to the Group management remuneration is revised from the month following
the close of the annual General Meeting of Shareholders.

11
11.1

Nomination, Selection and Retirement of Directors and Executive Officers
Criteria for Nominating and Selecting Candidates

The Board sets the “Policy on the Selection of Senior Management and Nomination of Director
Candidates” from the viewpoint of ensuring the transparency and fairness of the criteria for nominating andselecting candidates for the Group’s Directors and Group Executive Officers (the “candidates for Directors,etc.”). In addition, in order to ensure diversity in the Board, the Board promotes the appointment of diverse
human resources, including female candidates.

11.2

Officer Nomination Rights of Parent Company

Dentsu Group Inc., the Company’s parent company, may request the Company to propose proposals
to nominate one director and one corporate auditor (part-time corporate auditor) to the Company’s directors
and corporate auditors, respectively. The Company nominates candidates from Dentsu Group Inc. at theGeneral Meeting of Shareholders and submit agendas for the election of directors and auditors.

11.3

Clarification of the Process of Nominating and Selecting Candidates

From the viewpoint of ensuring transparency and fairness in the process of selecting and nominating
the candidates for Directors, etc., the Board establishes the “Procedures Concerning Selection and
Nomination of the Company’s Group Officers.”

11.4

Involvement of the Nomination and Remuneration Advisory Committee

The Board has the Nomination and Remuneration Advisory Committee as a voluntary committee
under the Board for the purpose of strengthening the independence, objectivity, and accountability in theselection and nomination of candidates for Directors, etc. The Nomination and Remuneration Advisory
Committee is composed of the Group President and Chief Executive Officer and all Independent Outside
Directors. The Committee provides advice (proposals, recommendations, and drafting of agendas) regarding
the selection, nomination, and dismissal of candidates for Directors, etc. independently or in response to
consultations by the Board or the Group President and Chief Executive Officer.

11.5

Retirement Age of Directors and Executive Officers

The Company’s directors (excluding independent outside directors and non-executive directors) andGroup Executive Officers are not reappointed when they are over 60 years old.

12

Management Successor Development Plan (Succession Plan)

12.1

Establishment of Management Successor Development Plan

The Board clarifies the method of evaluation as a successor of the Group, formulate a development
plan for the formation of a population of successors, conduct broad-ranging research and recruiting activities
for successors from within and outside of the Group, and implement measures for the formation of a
population, and conduct annual evaluations of such development plans.

12.2

Involvement of the Nomination and Remuneration Advisory Committee

The Nomination and Remuneration Advisory Committee evaluates the performance of the Group’s
senior management (particularly the Chief Executive Officer) and provides advice (proposals,
recommendations, and drafting of agendas) regarding the succession plans of the Chief Executive Officer
established by the Board independently or in response to consultations by the Board or the Group President
and Chief Executive Officer.

13
13.1

Orientation and Ongoing Training for Directors and Corporate Auditors
Policy on Orientation upon Assuming Office

The Board distributes basic materials on the Group’s corporate philosophy, business, financial, andorganizational matters to the Independent Outside Directors and Outside Auditors at the orientation uponassuming office.

13.2

Policy for Continuous Training

The Board sets the following policies and conduct ongoing training so that directors and corporate
auditors can fully understand their roles and responsibilities after their appointment.
(1) The Company provides information to directors and corporate auditors from time to time with theaim of deepening their understanding of the Group's management philosophy, business activities,
financial activities, organization, etc.
(2) Once a year, directors and corporate auditors attend camps to deepen the sharing and understandingof the Group's management philosophy, corporate management, business activities, organization,etc.
(3) With regard to important, specialized, urgent matters and other necessary matters, such as revisions
to laws, taxation systems, etc. directly linked to corporate management, knowledge of current affairsof high social concern, and the economic, legal, and social conditions of the Group companies
overseas, the Company provides its directors and corporate auditors with opportunities for thirdparty training at the expense of the Company.

13.3

Planning and Operation of Orientation and Continuous Training

Orientation upon assuming office and continuous training are planned and operated by the Board
secretariat.

14
14.1

Effectiveness Evaluation of the Board of Directors
Effectiveness Evaluation of the Board of Directors

In order to periodically evaluate whether the entire Board is functioning appropriately, the Board
conducts a self-evaluation once a year in principle. In the process of self-evaluation, outside third-party
organizations may be involved or advised.

14.2

Disclosure of Effectiveness Evaluation

For disclosure regarding the effectiveness evaluation of the Board, the Company discloses themethodology and summary of the evaluation results.

15
15.1

Internal Control System and Internal Audits
Fundamental Policy on Internal Control System

Recognizing the importance of establishing and operating an internal control system at the Grouplevel in order to ensure the effectiveness and efficiency of each of the Group’s operations, the reliability offinancial reporting, the compliance system (legal compliance), and the risk management system, the Board
formulates a “Basic Policy on Establishing Internal Control System” and ensure its proper operation.

15.2

Role of Internal Audits

The Board has the Internal Audit Department, which provides an assurance service (audit andassurance functions) and consulting service (advisory and guidance functions) from an objective standpoint
in order to review and evaluate the status of the management system for effectively achieving managementtargets, the expansion of business scale, and the status of decentralized management based on delegation of
authority. The Board places emphasis on supervision (monitoring) of the appropriate development of thesystem and whether their operation is effectively conducted.

15.3

Independence of Internal Audits

In order for internal audits to effectively achieve their objectives, the Board creates an environment
in which internal audits can be carried out in an objective, free and unbiased manner without any restrictions
imposed by others. The Internal Audit Department reports directly to the Group President and Chief
Executive Officer, and at the same time, establish a system to ensure that reports are made to the Board.

16
16.1

Risk Management
Group Risk Management Committee

The Board has established the Group Risk Management Committee to manage risks for the entire
Group in order to respond quickly and effectively to the diversification, complexity and decentralization ofrisks faced by the Group. The Board places emphasis on supervision (monitoring) of the appropriate
establishment of these systems and whether their operations are being effectively implemented.

16.2Internal Reporting System (Hotline)

The Board has established a Group Internal Reporting System, in which external attorneys are thedirect contact point for reporting or consultation, in order to promptly detect and respond to improprieties byofficers and employees of the Group. The Board will place emphasis on supervision (monitoring) whether
these systems are properly established and implemented effectively.

17
17.1

Related Party Transactions
Investigation, Approval, and Disclosure of Related Party Transactions

The Board sets appropriate procedures so that directors, corporate auditors and other related parties
do not use their positions to conduct transactions that harm the common interests of the Company and its
shareholders. For related-party transactions by directors and corporate auditors, the Company prepares awritten confirmation of the investigation into the existence of such transactions once a year. In the event ofmaterial facts, the Company reports to the Board and, with respect to transactions with directors by theCompany, obtains the approval of the Board in accordance with the laws and regulations as well as the Boardof Directors Regulations. In addition, transactions between related parties are disclosed in accordance with
the Companies Act, the Financial Instruments and Exchange Act and other applicable laws and regulations,and the rules and regulations established by the Tokyo Stock Exchange.

17.2

Transactions with Controlling Shareholders (Parent Company)

With respect to transactions with the parent company, Dentsu Group Inc., the Company determines
the management support fee by contract in consideration of the nature of operations, and the interest rate forfund transactions is determined by reference to market interest rates in the same manner as for generaltransactions. Through these and other measures, the Company will ensure that its business operations are
sufficiently independent from its parent company.

Additional Clauses
1. The revision or abolition of these guidelines is based on the resolution of the Board of Directors.
2. The Group Executive Officer in charge of legal affairs can change minor corrections such as errors oromissions.

<Established>

March 15, 2016

<Revised>

January 1, 2017
December 21, 2017
January 4, 2022
December 21, 2022
April 1, 2024
July 1, 2024